A management buyout will see Jake Watt take the helm at Lerwick Engineering & Fabrication (LEF), as he positions the firm to take advantage of low-carbon opportunities on Shetland and beyond.
Mr Watt will take over the Shetland-headquartered business following the retirement of the company’s current directors, and assume the role of managing director alongside an executive team of Callum Mills, Ian Hannah and Shaun Cameron who will oversee technical engineering, operations and commercial, respectively.
The buyout, now in its “final stages”, marks the latest step in a nearly 30-year evolution for the company, having grown from its roots in providing welding and fabrication work for the nearby Sullom Voe oil terminal.
Based at a 15,000 sq metre facility at Greenhead near the Port of Lerwick, the intervening years have seen the firm expand to tackle increasingly diverse projects, including work on the island’s waste-to-energy plant, district heating, power and even ferries.
Most recently, early 2022 saw LEF open a new base in Peterhead as it looks to bring its broad expertise to a new generation of energy transition projects across the highlands and islands, and north east.
“One of things we’re most proud of is moving off of the island and establishing our mainhead base at Peterhead,” explained Mr Watt. “That’s a real growth area for us.
“There’s a lot of work happening in the north east – and everywhere in our sector – but it’s one area I can really see ramping up quite quickly.”
The company employs 12 staff at its mainland base at Blackhouse, but has already found enough to work to require a move to a larger 700 square-metre site on the town’s quayside – also expected to be completed within the coming weeks.
On Shetland meanwhile, LEF has around 54 employees, but can flex its staff base up to 90 or so workers to meet demand for larger projects.
“One of the things that we try and always say to our clients is that being from an island, you need a solution you can rely on so we try and offer a full turnkey package,” he explained.
LEF collaborates with local design companies and draws on a range of facilities at Greenhead, including its own fabrication and coated weld capabilities, non-destructive testing (NDT), hydrotesting and a blasting and coatings workshop.
“Essentially we build it, make sure it’s sound and put it into your asset,” he said.
That is further supported by investments in a new stainless steel facility and in staff training.
Mr Watt says these local collaborations are even more important given the remote nature of many of its projects. “We just don’t have the manpower at times, so we form collaborations with other engineering firms on the island, and we’ve got a lot of those agreements with companies throughout the highlands, islands and northeast.
“For us it’s just about keeping work locally – and that’s one of our primary business goals is that increase in local collaboration to capture the big engineering projects in offshore wind and create jobs.”
Along with the change of hands will come a refreshed brand, as well as ambitious plans to increase turnover by 80% through next year. Mr Watt says that more diverse renewables and energy transition work will be key to meeting that goal.
“On Shetland we’ve diversified, but we’re looking to utilize our experience in oil and gas to springboard into the renewable space,” he explained, adding that his main hope was to bring the same “quality of service” expected on Shetland to clients in the north east and highlands.
“That’s part of the reason why we got our Peterhead base is to give that service offering. We’re a company understands the logistical challenges in the nature of working in remote places – challenges we are facing every day in Shetland.”
“For me the amount of opportunity in the space in the north east and the islands is enormous, especially with the energy transition,” he added.
He described the “hive of activity” on and offshore Shetland, with recent megaprojects ranging from the Quad 204 development, and the Shetland Gas Plant built as part of the TotalEnergies-led Laggan-Tormore development.
Those projects are becoming even more diverse today, with the Viking wind farm under construction, decommissioning work at the Dales Voe deepwater quay and the future promise of ScotWind and INTOG.
“Even things that you don’t expect, like the spaceport,” he added.
“What may happen in the future regarding hydrogen and carbon capture is up for debate but there’s huge potential there, so I see a decade of work ahead for the company at least.”
“It definitely will be a challenge – just the sheer scale of everything. But I guess in a way that Shetland is used to, and perhaps doesn’t really shout about enough. We are used to delivering really big scale projects.”
“It’s nothing that Shetland hasn’t done before.”